Charles's pal stalks House of Fraser

THE wealthy Weston family, owner of Associated British Foods, has emerged as the mystery suitor of department store chain House of Fraser.

Speculation that House of Fraser was being stalked grew after a bizarre announcement from the Department of Trade and Industry last month. The statement overturned a longforgotten ruling, made in May 1974, preventing High Street retailer Boots from bidding for the business.

Both companies expressed surprise at the announcement and observers were convinced that the ruling had been brought to the DTI's attention by another possible bidder, as it carried out initial searches on House of Fraser, whose stores include Army & Navy, Dickins & Jones, Rackhams and Kendals.

Financial Mail established that Galen Weston, a polo-playing friend of Prince Charles who runs the Canadian side of the £4 billion family empire, has been eyeing the beleaguered British department store sector and is ready to make a move.

According to a source close to the food dynasty, House of Fraser is his target. Its shares have slumped in the last four years and the company has a stock market valuation of £220 million.

It would be the first strategic move by the highly secretive family since the death of Galen's older brother, Garry, in February.

But it seems clear that ABF, the FTSE 100 company whose brands include Kingsmill bread, Twinings tea and Silver Spoon sugar, would not be used as the acquisition vehicle.

Galen Weston is thought to want to expand the family's department store business, which includes Fortnum & Mason, the upmarket London store run by his niece, Jana Khayat.

Last year, following pressure from stock market regulators, the Weston family's investment company, Wittington Investments, was used to take Fortnum & Mason private. Wittington also owns a majority stake in ABF.

However, the Westons will have much to prove if they succeed in taking control at House of Fraser.

Retail investments such as Fortnum & Mason, the Queen's grocer favoured by dowagers and well-heeled tourists, have shown little sparkle for years.

The Westons have been involved for more than half a century in the Piccadilly store, which was founded in 1707 and floated in 1939. But it has failed to inspire shoppers under the chairmanship of Jana Khayat.

According to one retail consultant, the store's famous traditionalism has become frumpy, outclassed by trendy London competitors such as Harvey Nichols and Selfridges.

Robert Clark at Retail Knowledge Bank said: 'The store is stuck in a timewarp.'

The story is similar at home furnishings group Heal's, bought by the Westons for £33 million last July. There have been no noticeable improvements and the management has not changed.

Consolidation has long been predicted in the department store sector, which has struggled against High Street competitors.

Though House of Fraser pleased investors last month by announcing a 44% surge in underlying profits, there are doubts that the chain can sustain its good run.